Meanwhile, Andy is at a dojo, in the mountains, training himself. There he sees Mai Shiranui who has a giant crush on Andy (Mai Shiranui is grand-daughter of the man who trained Andy). There Joe Higashi tells Andy that Terry lost a fight and has gone underground. Joe and Andy ask Master Jubei if they had ever heard of Krauser, and how he could have beaten Terry. Master Jubei told them that Wolfgang Krauser is one of the strongest fighters in the world and was not surpised that Krauser defeated Terry. So Andy said he was gonna fight Krauser but, Master Jubei said he wouldn't let him. If he was going to leave he would have to get pass him. So the two of them fought but, Andy won the fight. Master Jubei said told Mai to follow Andy and do whatever it takes to stop Andy from fighting Krauser. When they got at the airport Joe decides to go look for Terry, so Andy and Mai would go to Germany to look for Krauser and his castle. When Joe finds Terry drunk and in jail for fighting, he tells him that Andy has gone to fight Krauser. Terry told Joe not to let Andy fight Krauser or he'll die. Joe doesn't listen and leaves.
Mean while in Germany, Mai and Andy has found Krauser and his castle. The man Krauser left to guard his affairs saw Mai and Andy looking around at Krauser's Castle. So he found Mai and challenge her to a fight, which she accepts. Mai lands one good hit on him, but in the end the guy wins(i forget his name). When Andy finds Mai tied up by that guy, he quickly kicks that guys ass and untie Mai(i think this is where they fall in love). Now, back to Terry. He is still drunk but, at least he is out of jail. He goes to a bar and Tony gets challenge by a grow man to fight. He accepts and he gets the shit beat out of him. Then Terry gets out of his drunk state and kick the guy ass for telling the other guy to beat up the kid. Now he has regained his speed and strenght but he still isn't strong enought to beat Krauser. Now Joe has gone to fight Kruaser but, lose very quickly and ended up in the hospital. Terry gets to Joe and he tells Terry to meet Andy at the regular place. They meet at the graveyard, there they begin fighting because they have to be ruthless to defeat Krauser. They have a long and good fight but, it the end Terry wins with a new move. Then Terry goes to Krauser's castle to fight him. After a long and tiresome battle, Terry wins and Krauser admitting defeat throws himself into the lake.